Abstract
Using Shenzhen, China (a megacity) as the core demonstration hub, this project addresses common challenges faced across the Asia-Pacific region, including land scarcity, difficulties in renewable energy grid integration, and a lack of sustainable financial support. To tackle these issues, the project innovatively proposed and successfully implemented a deeply integrated systemic solution: the “Photovoltaic-BESS (Battery Energy Storage System) Smart Microgrid (Energy as a Service, EaaS) + Virtual Power Plant (VPP).”
This project focuses on four core dimensions to drive full-chain innovation: green finance empowerment, grid-side platform development, user-side resource aggregation, and university-enterprise collaborative R&D. Specifically, it pioneered a closed-loop “Financing-Investment-Construction-Management” system for Commercial and Industrial (C&I) distributed PV-BESS Assets under Management (AuM), securing the approval of RMB 5 billion in shelf-registered green quasi-REITs to efficiently mobilize capital for renewable energy investments. On the grid side, the project independently built the first city-level VPP control and management platform. Integrating 4,750 MW of distributed resources and providing 1,300 MW of maximum adjustable load, it filled a technological gap in the direct data acquisition and control of heterogeneous resources in megacities. On the user side, by establishing a smart microgrid within a net-zero park, the project achieved sub-second coordinated control of over 1,000 heterogeneous resources (with a control deviation of <2%), effectively resolving the challenge of balancing renewable energy accommodation and grid stability. Furthermore, through university-enterprise collaborative R&D on core “AI + Energy” technologies, and supported by relevant standard committees and pilot programs, the project has successfully driven the elevation of technical standards from the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) to national and international levels.
Multiple technological breakthroughs of this project have been appraised as “internationally leading” by authoritative institutions, and its core experiences were invited to be shared globally at the 29th UN Climate Change Conference (COP29). Championing a Just Transition, the project mainstreams gender equality throughout its entire lifecycle, actively empowering women to take leading roles in core R&D and management decision-making. Simultaneously, it promotes the systematization of training courses for emerging green professions, striving to integrate them into the Asia-Pacific Clean Energy Training Academy framework. Currently, this model has been successfully replicated across multiple regions in China, as well as in Southeast Asia, Europe, and the United States, demonstrating exceptional commercial scalability and broad international application prospects.
1 Preface
1.1 Project background
The APEC region is currently at a critical phase of energy transition. The development of new-type power system universally faces common challenges such as scarcity of land resources, high power load density, difficulties in integrating renewable energy into the grid, and lack of sustainable financial support. As a key participant in energy cooperation across the Asia-Pacific, Towngas leverages its century-long advantages in energy operation and has joined hands with multiple partners to pioneer an innovative pilot project of Photovoltaic-BESS Smart Microgrid (EaaS) + Virtual Power Plant (VPP) in Shenzhen, China. This project provides a highly valuable Guangdong-Hong Kong-Macao Greater Bay Area Model for addressing the above-mentioned challenges in the Asia-Pacific region. The project was born against the following profound backgrounds:
(1) Zero-carbon strategic transformation of 164-year utilities
As one of Hong Kong’s oldest public utility companies, Towngas is undergoing an energy transformation spanning a century. During the annual sessions of the National People's Congress and the National Committee of the Chinese People's Political Consultative Conference (the Two Sessions) in 2021 and 2022, Dr. Li Ka-kit, Chairman of the Group, put forward proposals on smart energy. This strategic vision charted a clear path for the low-carbon transition of traditional energy enterprises. The proposals also received a response from the National Energy Administration: (China) is to explore supporting qualified cities and regions in building zero-carbon demonstrative cities centered on smart energy, and to solidify the foundation for urban low-carbon and zero-carbon development.
Dr Lee ka-kit Proposed at the Two Sessions
(2) Towngas Energy Deploys Hundreds of Net-Zero Industrial Parks in the Chinese Mainland
As a core subsidiary of Towngas, Towngas Energy is the Group’s sole entity for investment, operation and management of renewable energy businesses in the Chinese Mainland, undertaking the important mission of the Group’s low-carbon transition. Towngas Energy focuses on developing new energy projects including distributed photovoltaic, Battery Energy Storage System (BESS) and Net-zero smart industrial parks. It has successfully deployed 128 Net-zero smart industrial parks across 24 provinces, autonomous regions and municipalities, providing strong support for the achievement of China’s “Dual Carbon” goals. Among them, Shenzhen, as the core engine of the Greater Bay Area, serves as the most representative frontier for Towngas Energy to promote the integration of Net-zero parks and new-type power systems.
(3) Shenzhen's "virtual power plant" is at the forefront of the Chinese Mainland and has become a new green business card for the city
China Southern Power Grid Shenzhen Power Supply Co., Ltd. is responsible for the power supply of Shenzhen and Shenzhen-Shenshan Special Cooperation Zone in the Guangdong-Hong Kong-Macao Greater Bay Area. In the wave of the energy revolution, Shenzhen Power Supply Co., Ltd. is not only a power supplier but also a “promoter” of the low-carbon transition.
Despite being a mega-urban power grid with the most-satisfying electricity supply system and high load density, Shenzhen’s power grid faces severe challenges including scarce land resources, a low share of local new energy, and a widening peak-valley gap in power consumption. Its energy structure and power supply characteristics are highly similar to those of Hong Kong. To tackle these problems, Shenzhen, together with Shenzhen Power Supply Co. Ltd., took the lead in building the Chinese Mainland’s first virtual power plant (VPP) management center featuring entity-based, market-oriented and continuous operation. This initiative has laid a solid foundation for the aggregation and optimized control of massive distributed resources—such as building air conditioners, charging piles, and battery energy storage systems (BESS) —while pioneering efforts in national VPP policy development, standard setting, and precise response mechanisms. It has successfully turned VPP management into a green signature card for Shenzhen’s energy industry.
(4) Based in the Greater Bay Area, providing China's demonstration for the energy transition in the Asia-Pacific region
This pilot project launched in Shenzhen by a Hong Kong enterprise, rooted in Hong Kong and supported by the Chinese mainland, has successfully explored a clear path for traditional public utility companies to transform into integrated smart energy service providers. For other economies in the APEC region that also face aging power grid facilities, difficulties in renewable energy integration, and a lack of sustainable financial support channels, this model offers a highly referential and replicable Chinese solution for advancing energy transition and the construction of Net zero parks.
1.2 Project Basic Information
Jointly initiated by Towngas, Shenzhen Power Supply Co., Ltd., Towngas Energy Investment Co., Ltd. and Tsinghua University, this project takes Shenzhen, China as its core demonstration base and extends its influence nationwide. Responding to the high flexibility requirements of new-type power system and the safe, low-carbon operation needs of mega-urban power grids, the project innovatively proposes a systematic solution for the deep integration of photovoltaic-BESS Smart Microgrid (EaaS) + Virtual Power Plant (VPP).
During implementation, Towngas leads green finance innovation and provides strategic support for renewable energy development. Shenzhen Power Supply Co., Ltd. takes charge of the hierarchical construction and application of city-level virtual power plant. As a customer-side virtual power plant operator, Towngas Energy constructs photovoltaic-BESS Smart Microgrid (EaaS) based on the innovative model of Net-zero smart parks, realizing the aggregation and regulation of massive distributed resources. Tsinghua University focuses on key technological breakthroughs for virtual power plant in Net-zero smart parks, offering cutting-edge theoretical support and algorithm development services.
This highly collaborative ecosystem model not only effectively solves the challenges of power supply-demand balance and renewable energy accommodation in large power grids at the technical level, but also provides the APEC region with a benchmark smart grid case that is technically feasible, commercially closed-loop, economically self-sufficient, and of strong international promotion value in terms of business closed loop.
Shenzhen Virtual Power Plant Management Center
2 Smart and Low-carbon Strategy and Planning
2.1 Innovativeness
The innovative concept of this project stems from a profound insight into the fundamental pain points of new-type power systems. By fully leveraging Hong Kong’s strengths as an international financial center in green capital, the project unites four parties to perform their respective duties, collaborate and complement each other’s advantages, focusing on four core areas: green finance empowerment, grid-side platform development, user-side resource aggregation, and university-enterprise joint technological breakthroughs. Details as following:
(1) Green Finance Innovation
To address the long-standing financing barriers in the clean energy sector, and leveraging Hong Kong’s advantages as an international financial hub, an innovative AuM (Assets Under Management) financing model for commercial and industrial distributed photovoltaic and BESS has been established by Towngas, forming a closed loop business model encompassing fundraising, investment, construction and operation. This model provides a pathway to addressing the challenge of sustainable investment in renewable energy and aligns perfectly with the trends of energy digitalization and financialization. Supported by an approved shelf offering of RMB 5 billion for green quasi-REITs, this model has successfully facilitated three consecutive issuances of carbon-neutral quasi-REIT products backed by photovoltaic and BESS assets on the Shenzhen Stock Exchange, raising a total of nearly RMB 1.8 billion. This marks the first successful issuance of quasi-REITs by a Hong Kong-funded company in mainland China, and also the first quasi-REITs in the market focused on commercial and industrial distributed photovoltaic and BESS assets. Additionally, an “inter-institutional REIT” targeting new energy infrastructure carbon neutrality was issued on the Shenzhen Stock Exchange. This project involves underlying assets valued at RMB 507 million, with an issuance scale of RMB 305 million, and its investors include a diverse range of financial institutions such as leading insurance companies, state-owned investment institutions, foreign institutions, trusts, and securities firms, further broadening the channels for attracting investment. These capital market practices have proved the commercial viability of this asset operation model, providing a factual reference for addressing the financing challenges of clean energy infrastructure in the APEC region.
Bell-Ringing Ceremony at Shenzhen Stock Exchange for the Carbon-Neutral Quasi-REIT Product (left), Posters for quasi‑REITs and Inter-institutional REITs (right)
(2) Grid-side Virtual Power Plant Control and Management Platform Innovation
We lead the tackling of core grid-side technologies, based on the long-term trend of urban energy digitalization, intelligence and greening transformation, focus on the core pain points of distributed resource scheduling in the new-type power system, carry out fully independent technological, software and hardware innovation, and build a core technical base supporting the implementation of the solution. Relying on the accumulation of power grid dispatching technology, we have developed a massive distributed resource aggregated virtual power plant control and management platform, built a highly scalable and open multi-agent heterogeneous distributed resource monitoring and control architecture, broken through the core technologies of end-to-end situation awareness edge computing and multi-level operation platform, and realized direct collection and control of massive fragmented distributed resources; integrating 5G power dedicated chip security computing and protection technology, we have built a "cloud-edge-end" collaborative intelligent control system, combined with the unified power market rules in the southern region, innovatively constructed a multi-type power market trading mechanism and bidding strategy, and completed the closed-loop operation of a million-kilowatt-class urban power grid virtual power plant resource pool. Seizing the future trend of "AI + energy" and "digital energy", relying on power large models and trusted artificial intelligence technology, we have developed multi-scenario and multi-time-scale hierarchical control technology, built a multi-level energy interconnection security system and public service evaluation system, and promoted the in-depth integration of energy data and government energy public services.
(3) User-side EaaS & VPP operator innovation
Based on the urgent needs of commercial and industrial users for low-carbon transformation and high proportion of new energy installed capacity, focusing on the pain points of terminal energy use scenarios, relying on the independently built "TeraPlanet" AI+ energy operation platform, Towngas Energy has implemented a customized solution for the in-depth integration of " photovoltaic-BESS Smart Microgrid (EaaS) + Virtual Power Plant (VPP)". Integrating multi-dimensional intelligent algorithms and equipped with internationally leading resource hierarchical optimization scheduling technology, it can dynamically adjust BESS operation in real time, realize second-level collaborative regulation of more than 1,000 heterogeneous resources (response time <60 seconds, control deviation <2%), effectively solve the problem of local consumption of new energy and improve the stability of weak power grid systems. Towngas Energy has built a three-layer control architecture of "cloud-cluster-end", pioneered the DAN-NFN probability density prediction algorithm, and overcome the pain point of high-precision prediction with small sample data; at the same time, Towngas Energy has built a digital base of "Internet of Things + data" dual middle platforms. The IoT middle platform adapts to more than 100 mainstream photovoltaic-BESS equipment protocols, realizing seamless access and second-level collection of heterogeneous equipment. The data middle platform breaks through multi-source data barriers and eliminates data silos.
(4) Specialized university-enterprise cooperation
Towngas Energy has reached a special cooperation with Tsinghua University, jointly establishing the Tsinghua-Towngas Energy Net-zero Smart Industrial Parks VPP Technology Joint Research Center to promote cutting-edge technology R&D and empirical demonstration.
Tsinghua-Towngas Energy Net-zero Smart Industrial Parks VPP Technology Joint Research Center
The two parties have specially carried out research and application of key technologies for AI intelligent aggregation and regulation of virtual power plant in zero-carbon parks, developed the "TeraPlanet" AI+ energy operation platform, and promoted technological innovation and landing demonstration related to dynamic aggregation, intelligent decision-making and optimal scheduling of distributed energy resources. The relevant technical achievements of the project have been appraised by the China Electricity Council as reaching the international leading level.
2.2 Inspiration
The strategic planning and innovative practice of this project provide a highly inspiring solution for economies at different development stages in the APEC region. Its impact goes beyond a single energy sector and radiates to finance, construction, industry, transportation and other industries.
(1) Inspiration for sustainable investment in renewable energy: The successfully practiced "AuM asset management + green REITs" model of the project provides an extremely valuable practical reference for developing economies in the APEC region that lack funds for clean energy infrastructure construction. It proves that stock green assets can be revitalized through financial instruments, inspiring subsequent projects to get rid of dependence on government subsidies, solve the dilemmas of capital shortage, long payback period and lack of sustainable green financial investment mechanisms, realize rapid capital return through the capital market, and provide fund guarantee for the rolling development of power stations.
(2) Inspiration for urban power grid governance: For many cities in the Asia-Pacific region facing similar problems as Hong Kong and Shenzhen, such as shortage of land resources, high power load density and rapid growth of renewable energy, the "mass resource group regulation and group control" and "100% independently controllable software and hardware" solutions of this project show how to transform cross-border resources such as building air conditioners (construction sector), charging piles (transportation sector) and industrial production lines (industrial sector) into power grid flexibility assets through software algorithms and edge computing, delay the investment in traditional power grid hardware upgrading, and improve the asset utilization efficiency of users. This model is currently planned to be promoted to Southeast Asia, Europe, the United States and other regions, showing strong international replicability.
(3) Inspiration for smart microgrid (EaaS) construction: By building a "source-grid-load-storage integrated" smart microgrid, the project deeply aggregates the park’s photovoltaics, BESS and industrial flexible loads. This enables not only refined energy management for the park, but also transforms it into a prosumer equipped with two-way regulation capabilities to participate in and benefit from the power market. It can not only realize its own cost reduction, carbon reduction and stable green energy supply, but also participate in power market transactions, carbon asset transactions and EaaS + VPP collaborative regulation to obtain value-added benefits. The project not only provides a path reference for various industrial parks, as the main economic engine in the APEC region, to build smart microgrid (EaaS), but also creates a implementable micro-ecological model for exploring industrial low-carbon transformation in the Asia-Pacific region.
(4) Inspiration for Net-zero park construction: With "Net-zero smart park" as the core scenario, the project invests in the construction of diversified energy infrastructure to achieve green energy supply, provides a variety of energy and carbon services to achieve cost reduction and carbon reduction, and optimizes energy management through the "TeraPlanet" platform to help industrial parks achieve the Dual Carbon goals, forming a replicable and promotable integrated model of "investment and construction of renewable energy infrastructure + collaborative service system of professional companies + smart microgrid services", helping economies in the Asia-Pacific to jointly promote energy transition and carbon neutrality goals with parks as carriers.
Net-Zero Smart Park Model Diagram
2.3 Clearness
In the process of implementation and promotion, we attach great importance to the openness and transparency of information and the cohesion of industry consensus. Unlike many technology policies that are explored behind closed doors within a single enterprise, this project aims to differentiate itself from similar policies by translating the company's innovation practices into open and transparent “industry standards”.
2.3.1 Establish an open and transparent communication channel between the public and the industry
This project promotes the standardization and transparency of virtual power plant technology by promoting the construction of standardization:
(1) Established a standardization technical committee and establish transparent collaboration channels. Through the establishment of the first local virtual power plant standardization technical committee in China, industry information barriers have been broken down, providing a clear and transparent channel for industry dialogue and collaboration for the public, investors and upstream and downstream enterprises in the ecological chain.
(2) Been approved as national standardization pilot, leading the transformation of the standard system to the national level. Through the implementation of the virtual power plant standardization construction and operation pilot project, we will lead the industry direction with high-quality standards and actively promote the transformation of standards from the Greater Bay Area to national and international standards.
Shenzhen Virtual Power Plant Standardization Technical Committee (left), National Virtual Power Plant Construction and Operation Standardization Pilot (right)
2.3.2 Systematic and transparent policy system and information disclosure mechanism
In June 2022, the Shenzhen Municipal Development and Reform Commission issued the "Shenzhen Virtual Power Plant Landing Work Plan (2022-2025)", which is the first local virtual power plant work plan in China. The plan specifies that the standard specification system of the virtual power plant should be improved. Formulate local standards for the response interaction between new energy vehicles and charging and replacement facilities, improve the management system of charging and replacement facilities, and incorporate responsiveness into the functional scope of pile products. For special application scenarios such as new energy vehicles and power grids (V2G), buildings (V2B), and renewable energy (V2R) energy interactions, standard specifications such as overall adjustment of adjustable resources, terminal control, and aggregation coordination have been formulated to improve the technical requirements for energy conversion of existing equipment. In August 2022, the Shenzhen Virtual Power Plant Management Center was established, the first government-authorized virtual power plant management entity in China, marking a new stage of rapid development of Shenzhen virtual power plant.
In 2023, Shenzhen officially issued the "Implementation Rules for Precision Response of Virtual Power Plant in Shenzhen", which provides a system and financial guarantee for the normalized participation of virtual power plant in power grid regulation and control, and clarifies that the Shenzhen Virtual Power Plant Management Center is responsible for organizing the registration of Shenzhen virtual power plant operators, accurate response organization, accurate response settlement, contract management, information disclosure and submission, training publicity and other work. Towngas Energy took the lead in obtaining the qualification of Shenzhen Virtual Power Plant Aggregator and won the title of Annual Demonstration Operator, sharing its experience at the Annual Operator Conference.
Shenzhen Annual Conference of Virtual Power Plant Operators (Left),Towngas Energy shared their experience at the operators' conference (Right)
In June 2024, the Shenzhen Municipal Development and Reform Commission issued "Several Measures to Support the Accelerated Development of Virtual Power Plant in Shenzhen". The policy is highly operable and continuous. It introduces 12 specific measures to support the development of virtual power plant in the city from four aspects: the supply of key equipment, the level of interaction between the vehicle network of charging and replacing facilities, the intelligent transformation of buildings and parks, and the aggregation and response of distributed resources. Under the guidance of the policy, Towngas Energy has invested in and constructed multiple projects in Shenzhenin, such as EaaS + VPP project at Futian District Government Compound, Shajing Heavy Truck Charging Station VPP project, and Skywell Automobile EaaS + VPP project. With the industrial park as an anchor, these projects have successfully aggregated and regulated over 100 megawatts of various distributed resources.
3 Renovation Measures and Implementation
3.1 Practicability
3.1.1 Deployment of first Virtual Power Plant Control and Management Platform in China
Key technological research is conducted on the access, aggregation, regulation and operation of virtual power plant (VPP) resources. Innovations are made across three dimensions: theoretical research, equipment development, and practical application. Shenzhen serves as the pilot city for large-scale, multi-scenario engineering implementation. The relevant scientific and technological achievements have been appraised by the China Electric Power Enterprises Federation and the China Electrical Engineering Society, and have reached the international leading level as a whole.
First, multiple cross‑temporal uncertainties of distributed resources are characterized for the first time. A novel aggregation method considering multi‑source uncertainties is developed to aggregate adjustable capacity under EV charging and building AC consumption uncertainties. All distributed resources maintain executability after de‑aggregation.
Second, a high-trustworthy multi-scenario collaborative dispatching method for virtual power plant (VPP) is proposed. It realizes the optimal dispatching of VPP distributed resources at multiple hierarchical levels including the full China Southern Power Grid (CSG), main transformers and feeders. This supports megacity power grids to mobilize massive dispersed resources to provide services such as grid congestion mitigation, peak shaving, and frequency regulation. The method enables VPPs to accurately track grid dispatching instructions, with a tracking accuracy of ≥95%. This achievement has been officially documented and issued by the CSG Power Dispatching Control Center, and has been promoted and applied across the entire China Southern Power Grid.
Assessment of VPP dispatchability and the risk-economic trade-off
Low-carbon optimal grid dispatch
Third, the first virtual power plant control and management platform with cloud-based deployment in China has been successfully constructed. The platform enables real-time observability, measurability, controllability and availability of load-side adjustable resources across the full voltage-level topology of urban power grids. Loads are connected at the device level (e.g., to a single charging pile) and monitored in real time on a minute-by-minute basis in accordance with the “station-line-transformer-user” hierarchy. This establishes end-to-end connectivity for VPPs to participate in the full-service chain of multi-level grid operations, including peak shaving and valley filling, frequency regulation reserve, and local grid congestion mitigation. The platform supports a maximum of over 100,000 access control units. Key technical indicators include: a response time of ≤5 seconds for decomposed regulation of adjustable resources; a tracking accuracy of ≥95% for grid dispatch instructions; and an instruction response time of ≤10 seconds. These leading technical indicators have reached international advanced level, filling the technical gap in China.
Shenzhen VPP Control and Management Platform
3.1.2 Development of user-side “TeraPlanet” AI + energy operation platform
We have established the "TeraPlanet" AI+Energy Operation Platform featuring a "cloud-cluster-edge" collaboration architecture. Adopting an interaction model of "internal hierarchical management, unified external presentation, and cloud-edge collaboration", it breakthroughly addresses the bottlenecks of distributed resource aggregation challenges and complex massive heterogeneous data processing, thereby enabling the efficient aggregation and intelligent scheduling of distributed energy resources.
EaaS (Energy as a Service) Diagram
The key technologies of AI smart aggregation and regulation of EaaS + VPP in Net-zero parks based on the construction of new-type power systems include the following specific technological innovations. The relevant scientific and technological achievements have been appraised by the China Electric Power Enterprises Federation, reaching the international leading level.
(1) Accurate demand response price prediction algorithm
Aiming at the key requirements of matching the demand response cost of load resources with the clearing price in the commercial operation of virtual power plant, an algorithm based on transfer learning was developed, using a typical demand response market sample training model, and then migrating to the local market. A probabilistic distribution estimation network-network prediction network (DAN-NFN) algorithm is proposed to achieve accurate prediction of demand response electricity price in the future, which provides a basis for collaborative optimization algorithm and aggregation scheme calculation.
DAN-NFN algorithm
(2) Resource hierarchical optimization scheduling algorithm
The "TeraPlanet" platform has the "three possible" functions of predictable load, decomposable tasks, and adjustable resources. After the platform receives the grid adjustment requirements, it first conducts power generation prediction and load prediction for the aggregated resources, and calculates the adjustable capacity of each resource; secondly, it confirms the load baseline, dynamically aggregates according to the type, geographical location, adjustment capacity size, response speed and other characteristics of the distributed resources, decomposes the demand response task, and optimizes the adjustment capacity of different resources.
(3) Optimal filing decision algorithm considering uncertainty
In view of the uncertain factors such as adjustable load, electricity price, and renewable energy, a bidding model for virtual power plant including BESS and adjustable load is innovatively developed, and a robust bidding strategy is formulated using the conditional value-at-risk (CVaR) stochastic planning method. The model considers the VPP aggregator's scheme of allocating profits to each resource entity to cope with different uncertainties in the load of each entity, thereby increasing the overall VPP revenue expectations.
3.1.3 Terminal equipment
(1) Development of Unified Access Terminal for Virtual Power Plant and Power Grid focused on Data Collection and Cybersecurity
In terms of data collection, a unified information model for massive device access of virtual power plants has been formulated for the first time. Automatic protocol identification, filtering and conversion modules compatible with the construction, power and PLC industries have been developed, greatly reducing the docking difficulty of equipment communication and control. In terms of security protection, a lightweight encrypted authentication security protection solution is proposed for the first time, which fulfills the low‑cost requirements on communication latency and network security when distributed resources of virtual power plant are connected to dispatching platforms and participate in frequency regulation and peak shaving services.
VPP industrialization solutions
(2) High-Performance edge intelligent gateway (Terallite Pro) for user-side smart microgrid (EaaS)
The high-performance edge intelligent gateway (Terallite Pro) independently developed by this project has achieved key technological breakthroughs in the four dimensions of "intelligent algorithm, industrial protection, multi-dimensional communication and underlying architecture".
Core value of Terallite Pro edge computing
In terms of algorithm control, it relies on GW-level massive data to precipitate a proprietary optical storage and sales strategy to achieve second-level precise regulation and profit maximization; in terms of hardware protection, it builds an industrial-grade fuselage based on a five-layer advanced system architecture, which not only adapts to extreme temperature differences of -30 °C to +75 °C, but also has the national level 3 high-standard anti-electromagnetic interference and watchdog crash prevention capabilities; in terms of data interconnection, it not only has built-in rich protocol adaptation libraries (supporting MQTT, IEC and other protocols) to achieve flexible docking of massive heterogeneous equipment, but also supports "dual-seamless hot backup switching" of 4G/WAN/WiFi multi-network links, which completely breaks the hidden danger of traditional gateways in complex working conditions and ensures the ultimate reliability of EaaS + VPP underlying data interaction and equipment control.
3.2 Replicability
This project has created the "EaaS + VPP" model, which has a high potential for cross-regional replication and can provide a useful reference for APEC economies in energy security, green transformation and inclusive development.
3.2.1 Excellent benchmarking effect and extensive replication practices at home and abroad
The technology and management model of this project has been fully verified in the mega-city of Shenzhen and replicated on a large scale in the Guangdong-Hong Kong-Macao Greater Bay Area, becoming a benchmark for technology, application and management in the field of EaaS+VPP:
Scale and economic benefits: Support Shenzhen to build the earliest domestic virtual power plant management center with the most comprehensive resources. At present, 61 operators have been accessed, managing more than 4,750MW of distributed and flexible resources, and improving the system adjustment capacity of more than 1,300MW. Since normalized operation in 2023, the cumulative amount of electricity has been adjusted by 8,570,000 Kwh, generating about RMB 24 million of revenue for operators and creating more than RMB 256 million of direct social and economic benefits.
Domestic cross-provincial replication: This model has been widely studied and applied throughout the Chinese mainland, and management entities have been established in Shanghai, Hainan, Zhejiang, Hubei, Ningxia and other places; its series of management methods and technology platforms have also been extended to Shandong, Hubei, Guangzhou and other provinces and cities.
3.2.2 Broad applicability across regions and multiple stages of development
The microgrid technology used in this project is highly flexible and adaptable, and can be customized according to the energy endowments and grid conditions of different APEC economies:
For developing economies (promoting inclusiveness): In island countries such as Southeast Asia where there are a large number of power-free zones or weak power grids (such as Indonesia, the Philippines, etc.), the project can be used as a stand-alone or grid-connected microgrid system to provide stable and clean electricity to remote areas and significantly improve the accessibility and fairness of energy services.
For developed economies (enhancing system resilience): In countries with mature power markets such as Australia and Japan, this project intelligently dispatches massive distributed resources through the VPP platform, effectively mitigating the impact of high-density new energy grid connection, delaying the investment in upgrading and upgrading traditional power grids, and is highly in line with its energy low-carbon and digital transformation strategy.
3.2.3 “LEGO-style” modular design significantly reduces entry barriers
In view of the imperfect power market mechanism of many APEC members, this project innovation adopts the "LEGO-style" modular product architecture. This design supports efficient and flexible rapid deployment, greatly reducing the capital cost and technical barriers to VPP implementation. Relying on the Tsinghua-Towngas Energy joint establishment of the Net-zero Park E EaaS+VPP Technology Research Center and the deployment of 128 Net-zero smart industrial parks across the country, the project has built a standardized digital energy management platform and operation system, providing the Asia-Pacific region with plug-and-play localized demonstration experience.
3.3 Cost-effectiveness
Based on the EaaS+VPP model, the core financial logic of this project is to revitalize stock resources through extremely low-cost digital aggregation, replacing expensive traditional physical power grid expansion. To intuitively evaluate the investment return level of the project, this analysis adopts an internationally accepted unit economics perspective and makes accurate calculations according to the standard regulation capacity of 1MW.
3.3.1 Unit Investment Costs and Avoided Capital Expenses
In terms of unit investment, since there is no need to build large-scale power generation equipment, the initial investment cost (CAPEX) shared by intelligent terminal transformation, communication gateways and platforms required to access 1MW of flexible resources is only RMB 520,000. In contrast, if the traditional model is used to build a 1MW gas peaking power plant in a Shenzhen-sized large city, it needs to occupy about 300 square meters of land, and the investment cost corresponding to this land resource alone is as high as about RMB 5,000,000, excluding high infrastructure and equipment investment. With a light asset investment of RMB 520,000, this project directly avoids an investment cost of more than RMB 5,000,000, and the capital utilization efficiency has increased by nearly 10 times.
3.3.2 Direct Economic Return and Commercial Feasibility
This project not only provides key flexibility for the power grid system, but also creates stable and considerable cash flow for users and aggregators participating in the response. By accurately participating in power spot market transactions, demand response, frequency regulation and other auxiliary services, the 1MW EaaS+VPP regulation capacity can obtain an average annual direct economic benefit of 100,000 RMB. Based on the initial investment of 520,000 RMB/MW and the annual income of 100,000 RMB/MW, the static payback period of the project is only 5.2 years. In the field of energy infrastructure construction, the short payback period of the project proves the excellent commercial replication potential of this model. In addition, the EaaS+VPP accurately cuts peaks during peak load periods, effectively avoiding the impact of power outages on the real economy.
3.3.3 Comprehensive economic and environmental benefits
This project has achieved multiple win-win results in auxiliary grid operation, promoting low-carbon transformation and cultivating new business formats, with significant comprehensive benefits.
Environmental benefits: Taking the construction of a Energy as a service + virtual power plant with a regulation capacity of 1,000 MW as an example, it can help release 1.2 million square meters of land resources, promote carbon emission reduction of 520,000 tons per year, and reduce peak shifting losses of about RMB 500 million per year.
Industrial and Economic Benefits: The implementation of this project has greatly exerted the driving role of "chain leader" and "platform" aggregation. At present, it has successfully attracted and driven more than 100 enterprises to enter the EaaS+VPP industrial chain, deeply integrating 6 strategic emerging industries such as information technology, new energy, new materials, high-end equipment, new energy vehicles, and green environmental protection, as well as 3 future industries such as generative artificial intelligence, future network, and new energy storage. Through the concrete practice of new quality productive forces, it is expected to directly drive an output value of over 100 billion yuan during the 15th Five-Year Plan period, injecting strong impetus into the high-quality development of the regional economy.
3.4 Consistency
3.4.1 High alignment with Energy Policies and Strategies
At the international level, the exploration of this project is precisely in line with the common action direction of building a "flexible and resilient power systems" in the Asia-Pacific region. From clarifying the goal of "triple renewable energy capacity globally (by 2030)" in 2023, to putting forward the sustainable financing initiative to support clean technology investment in 2024, and to establishing "accelerate clean, sustainable, just, affordable, and inclusive energy transitions" as the core goal at the 2025 APEC Busan Energy Ministers’ Meeting, this series of international consensuses fully confirm the strategic value and forward-looking significance of promoting this project at this moment.
In China, this project is fully in line with the first national-level special policy for virtual power plant - Guiding Opinions on Accelerating the Development of Virtual Power Plant jointly issued by the National Development and Reform Commission and the National Energy Administration in April 2025. By building a cloud-edge collaborative virtual power plant control and management platform to aggregate distributed photovoltaics, BESS and adjustable loads, the project is a concrete practice of the technical path and business model advocated by the Guiding Opinions, accurately boosting the realization of the grand goal of the national virtual power plant regulation capacity "reaching 20 GW in 2027 and exceeding 50 GW in 2030".
Urban level: Promote and align with regional market-oriented trading rules. In Guangdong, the project is closely connected with documents such as the Implementation Rules for Virtual Power Plant to Participate in Electric Energy Trading in Guangdong issued at the end of June 2025. The project not only complies with the rules, but also provides key support for the implementation and verification of core mechanisms such as "who can participate, how to participate, and how to settle" in the policy system through pilot implementation.
3.4.2 Long-term Measures and Implementing Agencies
All provincial energy management authorities will issue relevant policies for virtual power plant construction and operation and set up entity institutions according to local conditions around the Guiding Opinions on Virtual Power Plant; as one of the first enterprises listed in the Guangdong Virtual Power Plant Operator Directory, Towngas Energy’s project practice directly participates in and promotes the implementation and verification of these institutional documents.
For example, the Futian District Government Compound PV-BESS-EV Charging Flexible EaaS+VPP built by Towngas in Shenzhen, as the first near-zero carbon flexible EaaS+VPP in China and the first public institution virtual power plant in Shenzhen, provides real operation data and operation experience for the formulation of clauses such as access management, capability testing and response execution in the Guangdong Virtual Power Plant Operation Management Implementation Rules; multiple projects such as Towngas’ Shajing Heavy Truck Charging Station VPP and Skywell Automobile EaaS+VPP are the first EaaS+VPP resources to participate in the regional spot market.
Futian District Government Compound EaaS+VPP / Shenzhen City, China
The implementation of the project not only precisely aligns with the policy requirements for the development of EaaS+VPP at the national level, but also promotes the formulation and refinement of local institutional documents in Guangdong Province through pioneering efforts. At the same time, it resonates with the strategic consensus on regional energy transition in the APEC region, thereby providing a robust policy foundation and institutional safeguard`s for the transition of EaaS+VPP from pilot demonstrations to large-scale, market-based operations.
4 Performance
4.1 Completeness
This project has shown excellent regulation performance in the process of building a new-type power system, and its response accuracy and operation effectiveness have been at the leading level. Up to now, the system has accessed 61 operating enterprises and 14,696 resource users, with a total aggregated adjustable resource capacity of 4,750MW and a maximum adjustable load of more than 1,300MW - equivalent to the power generation capacity of a medium-to-large coal-fired power plant. This regulation capacity accounts for 5.4% of the city’s maximum power grid load, ranking first in China, indicating that during peak power consumption periods, the project can independently undertake nearly one-tenth of the load regulation tasks, significantly reducing the operating pressure of the main power grid.
Since 2023, it has cumulatively implemented 170 precise response dispatchings, ranking first in China in response frequency. By coordinating and scheduling various resources including charging piles and swapping stations, smart buildings, industrial power equipment, distributed photovoltaics, BESS and 5G communication base stations, the cumulative regulated power is about 8,670MWh, effectively realizing the power grid "peak shaving and valley filling" and alleviating local power supply tension, equivalent to meeting the one-day power demand of about 250,000 urban households. In this process, it has reduced carbon dioxide emissions by about 7,168 tons and generated direct social and economic benefits of 256 million yuan.
In terms of ensuring the safe and stable operation of the power grid, the virtual power plant, relying on the "peak shaving and valley filling" mechanism, has significantly reduced the risk of power outages caused by load overload. At the same time, Shenzhen is continuously expanding the application scenarios of virtual power plants, and has achieved good results in dealing with local line overload, suppressing peak load, solving power grid congestion problems, and promoting large-scale electric vehicle-grid interaction. For example, during the summer peak power consumption period in 2024, the virtual power plant control and management platform successfully realized emergency load reduction in local areas by quickly identifying adjustable resources around overloaded transmission lines and issuing peak-shifting charging instructions to multiple charging stations, ensuring the power supply reliability of key industrial and people’s livelihood areas.
The above achievements not only demonstrate Shenzhen’s advanced level in the digital and intelligent governance of energy systems, but also fully verify the practical feasibility of virtual power plant in integrating decentralized energy resources and improving the flexibility of power systems. With the continuous expansion of adjustable resource scale, it will play a more critical role in the balance of power supply and demand and the promotion of carbon neutrality strategies in the Guangdong-Hong Kong-Macao Greater Bay Area in the future.
4.2 Verifiability
Since its launch in 2022, the platform of this project has been iterated to Version 3.0 and maintained routine stable operation. On the grid side, it has achieved interconnection with the power grid dispatching automation system and marketing management system to obtain operational and metering data of the power grid. On the user side, data from 61 operators have been integrated, with data uploaded at the minute level and an online data availability rate exceeding 95%.
VPP Control & Management Cloud Platform 3.0
Underlying hardware field measurement and IoT data collection: The total power consumption and photovoltaic generation data adopted by the platform are all sourced from on-site deployed smart meters, bidirectional energy meters and edge computing gateways. Supported by the pioneering unified IoT platform (compatible with over 100 mainstream device protocols), real-time data acquisition of underlying hardware is realized at the second-level and millisecond-level intervals.
Docking with external authoritative data interfaces: The external environmental variables required for platform operation all have official reference sources. Meteorological and environmental data are directly called from the public data of the National Meteorological Administration and professional meteorological service providers through API interfaces, and cross-verified with on-site micro meteorological stations; electricity price and market transaction data are securely connected to the official data interfaces of China Southern Power Grid, Shenzhen Power Supply Bureau and provincial power trading centers through special lines to ensure the accuracy of microgrid intelligent scheduling instructions and economic benefit accounting.
4.3 Impact
The relevant scientific and technological achievements of this project have been appraised by the China Electricity Council (CEC) and the Chinese Society for Electrical Engineering (CSEE), reaching an internationally leading level. It has won many major awards for technological innovation and digital transformation at the national and industrial levels, fully demonstrating its leading position in the construction of a new power system, the development of the energy internet, and the process of digital transformation.
The project's achievements have received multiple authoritative recognitions: at the national level, it has been included in key cases such as the White Paper "China's Energy Transition" released by the State Council Information Office (SCIO); at the industrial level, it has won the "Top 10 Global Internet Leading Projects" and the Gold Award in the Final of the 2nd Energy Electronics Industry Innovation Competition organized by the Ministry of Industry and Information Technology (MIIT); at the social responsibility level, it has been selected as a green and low-carbon advanced technology demonstration project by the National Development and Reform Commission (NDRC) and won the Golden Key Award for Social Responsibility of Electric Power Enterprises issued by the China Electricity Council (CEC).
These achievements fully reflect the project's outstanding capabilities in national-level platform construction, major technological breakthroughs, and industrial demonstration and leadership. In 2025, the project was designated by the state as a national pilot for the construction and operation of virtual power plant.
In terms of national and international recognition, the project has received more than 700 batches of visits, including research and investigation by government leaders, guidance by academicians and experts, and exchanges with domestic and foreign energy enterprises, winning high praise from senior national leaders and many academicians. International energy institutions from France, Luxembourg, Germany, Singapore and other economies and regions have come to exchange experience in project construction, forming a mature and replicable practice model at home and abroad. In 2024, the project was invited to participate in the 29th United Nations Climate Change Conference (COP29) to share practical experience in green and low-carbon development.
Sharing Experiences at the 29th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP29)
At the level of international exchanges and Hong Kong's green cooperation platform, we were invited to attend the 2026 IEEE PES International Conference and the Hong Kong Green Energy Week Special Forum. Facing international guests, we shared the integrated practical achievements of EaaS + VPP, demonstrated mature technical solutions for source-grid-load-storage coordination and user-side resource aggregation relying on Hong Kong's international window, and further enhanced the project's demonstration effect and international influence in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) and the global green energy field.
In-depth sharing of EaaS+VPP practices at the high-level roundtable of the 2026 IEEE PES International Conference & Hong Kong Green Energy Week Special Forum
Meanwhile, the "Zero-Carbon Smart Phase 1 Green Asset Support Special Plan (Carbon Neutrality)" issued by Towngas and its issuance has won the highest recognition in the domestic asset securitization industry, and won two awards, "Annual Innovation Institution" and "Annual Excellent Project of Enterprise Asset Securitization" respectively.
China Asset Securitization Forum "Annual Innovation Institution" Award (left), "Annual Excellent Project of Enterprise Asset Securitization" Award (right)
The implementation of this project has greatly exerted the driving role of "chain master" and "platform" aggregation. At present, it has successfully attracted and driven more than 100 enterprises to enter the virtual power plant industrial chain, deeply integrating 6 strategic emerging industries such as information technology, new energy, new materials, high-end equipment, new energy vehicles, and green environmental protection, as well as 3 future industries such as generative artificial intelligence, future network, and new energy storage, affecting multiple operation fields.
5 Gender Equality
5.1 Women Empowerment
In the development of the EaaS+VPP ecosystem, women are engaged across the entire industrial chain including technology R&D and market expansion, and excel in technical roles such as Internet of Things (IoT) and AI forecasting. Leveraging their communication and empathy skills, they coordinate demands from multiple stakeholders, design practical cooperation plans, optimize technology application experience, and strengthen the stickiness of ecological cooperation.
Annual Operator Conference Discussion Session
5.2 Equality
This project breaks the male-dominated barrier in the traditional energy and power industry and practices gender equality throughout the whole process. At present, a number of outstanding women in the EaaS+VPP sector have been deeply involved in core decision-making work such as virtual power plant business models and power trading strategies. They optimize team management with flexible and inclusive leadership, effectively reduce market risks through diverse perspectives, enhance the organization’s agility in responding to power sector reforms, and achieve gender equality and career development breakthroughs at all levels. The project integrates gender equality into its core ESG priorities, promotes the concept of green power from a female perspective, and enhances brand influence. Meanwhile, it provides green skills training and non-gender-discriminatory jobs, encourages men and women to create value together in energy transition, and sets a benchmark for sustainable development in the industry.
6 Just Transition
6.1 Just Outcomes
This project has achieved a win-win situation for all parties in supporting power grid operation, promoting urban low-carbon transition and fostering new business forms, with remarkable comprehensive benefits.
Environmental benefits: Taking a virtual power plant with 1,000 MW of adjustable capacity as an example, it can help release 1.2 million square meters of land resources, reduce carbon emissions by 520,000 tons per year, and cut peak-shifting losses by approximately RMB 500 million per year.
Industrial and economic benefits: The implementation of this project has given full play to the driving role of "chain leaders" and the aggregation effect of "platforms". To date, it has successfully attracted and driven more than 100 enterprises to join the EaaS+VPP industrial chain, deeply integrating six strategic emerging industries including information technology, new energy, new materials, high-end equipment, new energy vehicles and environmental protection, as well as three future industries including generative artificial intelligence, future networks and new-type energy storage. Through the concrete practice of new quality productive forces, it is expected to directly drive an output value of over RMB 100 billion during the 15th Five-Year Plan period, injecting strong impetus into the high-quality development of the regional economy.
Introduce user-side EaaS+VPP solutions to ecosystem
6.2 Decent Work and Workforce Development
Relying on the successful practice of this project, the project has gained high attention from society and the industry. In 2025, the Ministry of Human Resources and Social Security of China officially established the new occupation of Power Aggregation Operator, which is defined as virtual power plant operation personnel. This is the first new occupation in China’s power industry that features both green and digital attributes.
In 2026, the project team will jointly formulate and issue occupational standards with the China Electricity Council, and participate in the development of textbooks, question banks and assessment systems. Efforts will also be made to include this occupation into the framework of the Asia-Pacific Clean Energy Training Institute to support decent work and workforce development.